Walt Disney was founded in 1919 as an animation company. The firm’s success can be attributed to the Mickey Mouse character in 1928. Other animated films that set the company on the way to success include Pinocchio in 1940, Bambi in 1942, and Sleeping Beauty in 1959 (Maso et al., 2015) . The company's achievement increased from 1954 when Disneyland Park in Anaheim, California, was constructed. The park became an instant success after its completion in 1955. In the following years, the Walt Disney World Resort, Epcot in Orlando, Disneyland in Tokyo, The Disney Channel.
In 1984, Walt Disney’s CEO, Michael Eisner, implemented a broad strategy in Disney by acquiring ESPN, ABC, Fox Family Channel, Anaheim Angels, and Miramax Films. Further, Eisner oversaw the creation of Disneyland, Orlando, Paris, Hongkong, California adventure park, and theme park in France. Also, the Disney Cruise Line, Disney Interactive Game Division, and Disney Store Retail Chain (Latif, 2014) . Further, Eisner oversaw the creation of animated films such as The Little Mermaid, Beauty and the Beast, and Lion King. Eisner’s tenure ended in 2005 when he resigned.
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Robert Iger took over the leadership of Walt Disney in 2005. Iger joined the company in 1996, and over the years, he had managed to understand the industry well. In 2006, the company acquired Pixar animation studios and the cartoon character Oswald the Lucky Rabit from NBCU Universal (Latif, 2014) . In 2007, the company purchased 340-meter ships, which were added to the Disney Cruise Line. Iger also oversaw the acquisition of Marvel Entertainment in 2009. This would enable the company to produce motion pictures featuring the Iron Man, Spider-Man, Thor, Incredible Hulk, and Captain America.
Before 2014, Walt Disney was had broadly diversified its media and entertainment units. The organization included theme parks, production, and distribution of motion pictures, resorts, cable and television broadcast networks, and television stations. By 2013, the company had amassed revenues totaling 45 billion dollars, up from 35.5 billion dollars in 2007.
In 2014, the company faced some strategic issues (Latif, 2014) . Since 2008, Walt Disney had invested about 15 billion dollars on a theme park in China, ships which were added to the Disney Cruise Line and acquiring Pixar and Marvel. The organization had also funded a share buy-back plan that put a lot of pressure on its capital revenues. Despite injecting a lot of capital into the business units, some of them were making massive losses. As 2015 approached, Walt Disney CEO Robert Iger and his management evaluated the effectiveness of the diversification strategy adopted by the firm.
In 2014, Walt Disney was diversified into various units such as hotels and resorts, theme parks, cable networks, cruise ships, broadcast television networks, television production, operation of television stations, production and distribution of animated pictures, live-action, liv e theatre production, publishing music, and children books, retailing of consumer products and interactive media (Latif, 2014). The corporate strategy involved creating high-quality content for family consumption, using technological innovations to enhance the entertainment experiences, and expanding into the international market. The acquisition of Pixar in 2006 and Marvel in 2009 sought to improve the animation unit. By doing this, the company would increase the skills and characters in the animations. In 2010, Walt Disney acquired Playdom, thus increasing its presence in the gaming world. Additionally, the company acquired UTV in 2011 to enhance its expansion in the international market.
Disney’s business strategy involved offering enough funds to the parks and resorts. This would increase the company’s competitive advantage in the industry hence more profits. With this in mind, the company embarked on increasing the number of attractions in the California Adventure park (Maso et al., 2015). Besides, the company sought to increase the synergy among the units. For example, the company increased its presence on digital platforms by incorporating WatchESPN on the internet. Also, some of the most successful films developed by Disney were featured in the California and Florida parks.
Disney’s expansion in the international market was focused on targeting new opportunities in developing nations. For example, in 2012, the company had 75% viewers in China and Russia. Additionally, the company was present in about 100 countries globally (Latif, 2014). The company planned to introduce a Toy Story Land Attraction in Hongkong. At the same time, the organization created Shangai Disney resort in China. This amusement park was characterized by hotels, parks, and castle.
The Parks and Resorts unit included various resorts and parks in Orlando, California, and Hawaii. In addition, the organization had a substantial share in various resorts and parks such as Paris, Hong Kong, Shanghai. The revenues were generated from admission fees in parks, sale of food and beverages, charges for hotel rooms, sale of merchandise, and fees charged during cruise operations (Maso et al., 2015). For example, in Walt Disney World Resort, the company had many resort hotels. Besides, the resort included a 120 acre Downtown Disney retail specializing in retail, dining, and entertainment. This area encouraged consumers to dine and shop when out of the park. The resort included golf courses, spas, sailing, tennis, skiing, water parks, and a sports complex in Orlando.
In California, the resort was made up of theme parks, dining, entertainment, and retail areas. The park was created to ease the large number of people visiting Disneyland (Latif, 2014). The World of Color was added in 2010, and the Car Lands was added in 2012 to attract more visitors. Disney had a 51% share of Disneyland, Paris. Disneyland Paris had an entertainment complex, shopping, dining, convention center, and golf course. In Hong Kong, Disneyland held 47% of ownership. In Japan, Disney received royalties since it was owned and operated by Oriental Land Company. In Shanghai, the company had built themes hotels, dining spaces, and a recreational area. The Disney Cruise Line operated in Florida and Los Angeles. The cruise activities were customized to reach children and families.
In terms of studio entertainment, Walt Disney used to produce live-action and animated motion pictures. Consumers would access these products through DVDs, pay-per-view, live performances, and musical recordings (Latif, 2014). The motion pictures were produced and distributed using the Walt Disney Pictures, Marvel, and Pixel. Most of the motion pictures incurred losses during the theatrical distribution of films due to the high cost of production and advertising. The profits were only realized when the film was put on a DVD or blue-ray discs. This happens after three to six months since the theatrical release. Motion pictures generated profits when the movie was put on pay-per-view or video-on-demand (Maso et al., 2015). Regarding consumer products, the company had a retail chain and businesses that involved licensing merchandise and publishing children's books and magazines. By 2011, the company operated a range of stores in North America, Europe, and Asia. In addition, Disney could publish books, magazines, e-books, and apps.
Walt Disney uses a generic strategy of seeking a competitive advantage in the industry. This is achieved by offering unique products such as entertainment, amusement parks, and mass media. A generic competitive strategy enables a company to gain a competitive advantage against other organizations (Tanwar, 2013). Disney has managed to gain a competitive advantage against other organizations by providing unique products. Besides, the organization uses strategies that enhance growth in the firm by manufacturing products aligned with the needs of the global market. Essentially, Walt Disney grows through innovation and creativity.
References
Latif, M. (2014). Tactful acquisitions & mergers of the Walt Disney company improved its performance, showed by financial and industry analysis. Project: Corporate Finance. https://doi.org/10.5296/ijafr.v4i1.6082
Maso, C. B. D., Silva, W. M. D., Mello, P. C. D. & Filho, N. D. P. A. (2015). Integrating product portfolio with business strategy: Imagineering. Future Studies Research Journal Trends and Strategies. 7(2): 139- 155.
Tanwar, R. (2013). Porter’s generic competitive strategies. IOSR Journal of Business and Management. 15(1): 11-17.
